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What Actions Can Hurt Your Credit Score?

Credit Score

Your credit score is a barometer of creditworthiness. Lenders, landlords, insurers, and even employers base decisions on this rating. Your position on the scale from 300 to 850 defines what loans are accessible, how much they cost, what apartments you may rent, what jobs you may get, and more. When borrowers neglect their obligations, their scores go down. Discover four deadly sins of borrowing in our article.

To be fair, the scores do not always fall due to our missteps. Reporting errors are quite common. Top companies that help fix credit in the United States help millions of consumers annually. They communicate with national bureaus to get rid of false derogatories. 

How Scores Are Calculated

The two most common assessments in the country are FICO and VantageScore. Both rely on a similar scale and consider similar factors. For example, your history of payments is critical — it determines the largest share of the scores. Other important factors include the age of your credit history, how much you owe in total, how many different credit products you use, and new accounts.

Reliable credit fixing companies use this information to prioritize errors and achieve the strongest boost ASAP. Every consumer should understand how the calculation works, and what actions cause damage. Discover the top four below.

1) Skipping Payments

The way you make payments constitutes 35% of FICO and 40% of VantageScore. This is a critical indicator of your creditworthiness. Even a single missed payment can have serious ramifications. Being 30 days late is more negative than you may think.

If you act quickly, you may prevent the error from being reported. Every lender communicates with the bureaus regularly, but missed payments are normally reported after 30 days. If you are just a few days late, the flaw may not appear in your records. Communication is key — call the lender and ask them for a favor. While they are not obliged to agree, you may get a pass.

2) Overusing Your Credit

How much available credit do you have, and how much of it do you use? This affects 30% of your FICO assessment. High utilization is a red flag for lenders, as it shows that you are overly dependent on borrowed capital. This ratio describes revolving credit — i.e., your use of credit cards

To calculate it, divide the sum of your balances by the sum of limits. For example, if you have three credit cards giving $3,000 in total, and the sum of balances is $1,500, your utilization is 50%. This is outrageously high in the eyes of lenders and bureaus. Different experts set different thresholds.  Experian recommends utilizing no more than 30% of your limits. Other sources cap positive utilization at 10%.

3) Applying for a Lot of Credit in a Short Time

Lenders access your history to approve or deny your request. This leaves hard inquiries — special entries on the reports. They stay there for 2 years and may cause a temporary drop in the total.

A high density of hard inquiries is perceived as a sign of desperation. Lenders assume you are in dire financial straits or get repeatedly denied new credit. The conclusion is simple — apply for loans and cards only when you really have to.

4) Defaulting on Accounts 

These derogatories are extremely damaging to the score. For example, a chapter 7 bankruptcy will affect it for 10 years! Other negative information of this kind stays for 7 years. This includes foreclosures, repositions, charge-offs, and settled accounts. Being careful with your borrowing is crucial. Otherwise, you can only wait until these items age off the records. 

Your Score

How to Improve Your Score

Your strategy should depend on the accuracy of the evaluation. You can discover your score by going to or installing an app like Credit Karma or Credit Sesame. Next, collect your reports from for free. Until April 20, 2022, this service is provided weekly.

Examine your reports from TransUnion, Equifax, and Experian. Any of the bureaus may have inaccurate information about your past. If this is the case, find a trusted credit repair provider in your area. Check BBB ratings and websites like Consumer Affairs for credible reviews and feedback. 

How to Rebuild Your History

If the drop is your own fault, it is time to become a conscientious borrower. These strategies are useful for everyone. They may be applied in addition to repair, so you work on both fronts simultaneously. 

1) Make Outstanding Payments 

Prioritize any payments that are past overdue. They are extremely damaging to your score. The longer you wait — the bigger the impact. Act quickly to prevent further deterioration.

2) Pay All Bills on Time

Skipping payments affects the largest share of the evaluation. Thus, making all monthly payments on time is absolutely crucial. Set reminders if necessary.

3) Reduce Debt 

The total size of your debt defines a third of the score. As for credit cards, you should aim to reduce your balances as much as possible. Keep an eye on utilization, and try to limit the use of available funds. 

Another way to lower utilization is to increase the limits. If your bank does not agree to give more money, consider getting a secured card from another issuer. As your limits grow, utilization shrinks (provided you do not use them!). 

4) Think Twice Before Borrowing More

Do not apply for new credit unless you really need to. As we have mentioned, hard inquiries may also harm your status. Think twice before submitting any new applications. 

To Sum Up

Missing payments, utilizing too much of your limits, and applying for multiple loans are the most common causes of falling scores. Follow our tips to improve your borrowing behavior. If the score is unfair, find a trusted provider to repair it ASAP. Note that repair takes months, so check your reports regularly. Due to the pandemic, you can do it for free every week. 

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